Business Process Management Solutions

by Steve Byrnes and Michael Donnary July/August 2010
Across a variety of industries where legacy platforms are prevalent and challenging to replace (including banking and insurance), companies are considering Business Process Management (BPM) solutions as an alternative to system replacement. 
As equipment finance companies look to the future and consider alternatives to modernizing their legacy technologies, they may want to consider these in the mix.

Capgemini conducts a survey each year in conjunction with the ELFA — the Business Technology Performance Index (BTPI) survey, which focuses on trends in operations and technology in the equipment finance industry. In the survey there has been a consistent theme for the past four to five years — companies are being driven by business needs to update legacy platforms, yet the cost, complexity and potential risks force them to put off the initiative year after year.

One survey respondent captured the quandary succinctly, expressing concern both about the “…inability of their current platforms to meet current and future needs and the extensive, high-risk process of replacing the current core infrastructure.” In follow-up discussions with some of these respondents they cite: resource and budget limitations, concerns about multi-year implementation projects and the complexity of what has been built into their current infrastructure over a long period of time as issues that are difficult to mitigate. Many have expressed that unraveling the “spaghetti” of customizations and integrations, and the tens or hundreds of spreadsheets and access databases supporting the business can be a daunting task; and, there are no guarantees of success, no matter how much is spent on the effort.

At the same time, the needs of the business are growing. One BTPI respondent talked about needing a six-to-nine month lead time to fully support the rollout of a new partner program primarily due to the limitations of their core systems. The expectations of the business about the same program support were measured in weeks. Implementing a solution that is “…flexible enough to meet the changing needs of the business and our customers” was how another company described it.

Despite the challenges, many companies with limited requirements, straight forward business models and smaller size portfolios are good candidates for some of the new platforms on the market. Many of them have incorporated strong functional capabilities with a good technology infrastructure. Others however, might want to consider Business Process Management (BPM) solutions when they think about alternatives.

How do Business Process Management Solutions Work?
BPM solutions are software applications that are typically built around a few concepts:

  • Leave the underlying legacy platforms in place and allow them to continue to perform certain key functions — one example would be the back-end system would continue to produce lease and loan accounting entries.
  • Link the platforms together through a modern, configurable user interface — this platform integration is critical to leveraging the technology.
  • Deliver best in class process and business rules management — across not just the platform, but the entire enterprise.
  • Make the platform easy to configure — by the business. Some of the leading platforms do this through an intuitive graphical interface rather than through writing lines of code.
  • Enable an incremental delivery of the solution — since the underlying technology is not changing, companies often deploy new functionality in increments — often built and delivered in one to three-month intervals.

The objective is that rather than replacing aging core platforms with new ones, larger benefits can be gained from revitalizing and reengineering the workflows and operations associated with the business processes. This can be accomplished without the risk, cost and duration of a core system replacement.

One simple example is the deployment of BPM for asset management processes. This is an area that traditional servicing systems handle in a very limited way. These contract-centric systems often do not provide capabilities beyond the end of the contract life. A BPM solution for asset management processing might include:

  • Automated processing of end-of-lease communications with the customer.
  • Notifications and queuing of tasks upon notification from the customer of their end of lease option selection.
  • An online condition inspection report that might be completed by a warehouse team, including uploading of pictures and other documentation.
  • An automated generation of an invoice for damages or other charges.
  • A workflow that is triggered upon return of the equipment to the inventory, to begin remarketing activities.
  • The triggering of general ledger entries to support all of the above activities.

High-Level View of a Typical Architecture

For this asset management process, the BPM solution would provide the user interface screens (configured for the specific process), the workflow to move the transactions from resource to resource and the business rules to make “intelligent” choices based on the underlying transaction (for instance, if equipment = type “forklift,” then direct customer to return equipment to warehouse “A”).

A few other common uses of BPM solutions for equipment finance firms might include:

  • Building workflows that span front- and back-end systems — for instance, creating a buyout and rolling the buyout into the financing of new equipment.
  • Developing a shared service organization that can leverage a single customer service solution across multiple business units and multiple servicing systems.
  • Creating consistent, standardized processes that can be leveraged across multiple geographies, utilizing multiple core systems.

One of the key benefits of the platforms is that, unlike core platforms that are often deployed in a single phase, BPM solutions normally break the processes down into manageable pieces. Deploy customer service processes first, and then collections, asset management and originations — in other words — prioritize the components in the logical order that benefits the business.

Typical Core Platform Challenges Faced by Asset Finance Companies Today

  • Most asset finance applications lack automated workflow and business rules management capabilities.
  • The systems that do have these capabilities are often very complex to administer — to the point that a minor configuration change requires an expensive call to the vendor.
  • Many equipment finance organizations have multiple legacy front-end and back-end systems making it difficult to achieve process standardization across the enterprise.
  • There are often limitations on the ability of the firm to implement, maintain and monitor consistent business processes to meet regulatory compliance requirements.
  • The metrics needed to track services level agreements and key performance indicators may not be readily available making it difficult to identify opportunities for improvement, or if they are developed, the manual effort is often measured in days or weeks of effort.
  • Day-to-day processes rely on manual data collection, which increase data accuracy errors.
  • It is very difficult to make the business case to upgrade to a new core without driving significant improvements in efficiency and many platforms, (especially back-end systems) struggle to deliver those business case metrics.

The Technology
The technology underlying the leading BPM solutions on the market are focused on “ease of integration, configuration and use.” Some common technology elements would include:

  • Integration with existing operational systems such as ERP, CRM, originations, lease and loan accounting, and point solutions, which are bought and built over time,
  • Open frameworks that facilitate integration with industry service providers and business partners,
  • The ability to register new processes as Web services and integrate with existing Web services,
  • Complete database persistence for rules and processes with versioning, allowing rules created once to be used in multiple business applications,
  • An administrative console, along with a sufficient data model and a standard system management interface language, allowing administrators to track and change managed objects, including process definitions, processes, activities, manual tasks, and users and roles,
  • Support for industry standard security protocols, allowing users to access information in disparate systems from a single user interface as pervasive and ubiquitous as necessary to provide enterprise-wide coverage,
  • A distributed server architecture that provides speed, scalability and high availability,
  • Graphical user interface for building and maintaining business rules and processes,
  • A service-oriented architecture (SOA) that drives the underlying framework for the rules and workflows.

Is Your Firm a Good Candidate for BPM?
Frankly, not all companies are good candidates for BPM solutions. Given the enterprise capabilities of the platform, the business case must typically be driven across multiple equipment finance channels or large-scale portfolios. Companies with smaller portfolios and one or two go-to-market channels would likely be better served by modernizing their legacy core platforms. Alternatively, the model for a successful implementation often contains the following elements:

  • Multiple front- and/or back-end platforms (or multiple database instances of the same platform) — often times driven by business unit or geographical differences,
  • A need to deliver standardization and efficiency across processes, including back-end processes such as customer service, collections and asset management,
  • Small- and mid-ticket size portfolios, where transaction handling costs can quickly erode transaction lifecycle profitability,
  • Larger portfolios with significant transaction maintenance requirements,
  • A lack of workflow and ability to track metrics and key performance indicators across the transaction lifecycle.

Across a variety of industries where legacy platforms are prevalent and challenging to replace (including banking and insurance), companies are considering BPM solutions as an alternative to system replacement. As equipment finance companies look to the future and consider alternatives to modernizing their legacy technologies, they may want to include BPM solutions in the mix for consideration.

Steve Byrnes is the leader of Capgemini’s Asset Finance practice. His professional experience includes 26+ years of employment in, and consulting to, the asset finance industry. He uses his finance and operations background to assist companies with projects ranging from business strategy development/organization assessment, through the implementation of systems and processes required for execution. Byrnes can be reached by e-mail at

Michael Donnary is a senior manager in Capgemini’s Asset Finance Practice in Chicago. He has worked in and consulted to the banking and asset finance industries since 1992. In addition to system selection, implementation and organizational assessment projects, he has worked extensively with companies to integrate emerging technology solutions with existing legacy systems. Donnary can be reached by e-mail at

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